Resolving a simmering dispute, ousted Medicare plan agrees to pay

ALEXANDRIA, Va. The independent pharmacy lobby is hailing an agreement by Fox Insurance to begin paying overdue prescription coverage claims to the pharmacy benefit management firm administering its drug-coverage plan — and the retail pharmacies serving that plan.

Those claims have been frozen since Fox was ousted from the Medicare Part D prescription drug program in March over alleged policy violations. That marked the first time in the Part D program’s four-year history that the Centers for Medicare and Medicaid Services terminated a contract with a Part D drug plan, according to CMS and McKnight’s news service.

Fox’s subsequent decision to suspend claims payments while it worked to resolve its Medicare issues put a financial squeeze on both its PBM administrator — ProCare Pharmacy Benefit Management — and the community pharmacies that dispensed prescriptions to Medicare patients enrolled in the Fox plan. It also spawned a months-long campaign by the National Community Pharmacists Association to restore the payment pipeline.

Following bipartisan pressure applied by two powerful members of the Senate, the Centers for Medicare and Medicaid Services and the NCPA, the insurer agreed earlier this month to begin paying its delinquent Part D claims. Fox agreed July 9 to wire $13.6 million in overdue payments to ProCare, which is “currently closing claims and beginning to process payments for claims from the period of Feb. 16-28, 2010 in order to provide long-awaited reimbursements to independent community pharmacies for providing prescription drugs to seniors,” according to NCPA.

“Fox Insurance still owes tens of millions of dollars in unpaid Fox insurance claims from March, and is promising to clarify a few lingering issues to fulfill its remaining obligations,” the independent pharmacy group asserted today.

NCPA's effort to resolve the issue kicked into high gear in May, when it sent a letter to CMS asking the agency to force the insurer to pay its delinquent claims. In response, the Medicare agency began applying pressure on Fox.

“However, it apparently took the interventions of the chairman and ranking member of the Senate Finance Committee, Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, who sent a letter on July 6 to prompt action from Fox Insurance,” noted NCPA.

“We want to thank Senators Max Baucus and Charles Grassley for their strong leadership in resolving the issue of the withholding of payments for rightful Medicare Part D prescription drug claims from independent community pharmacies that contracted with Fox Insurance,” NCPA’s acting executive vice president and CEO, Doug Hoey, said today. “Even though CMS terminated its Part D contract, Fox had a responsibility to honor these claims.

“We appreciate Fox Insurance’s recent efforts to set things right,” Hoey added. “It is a first step, but only a step, in solving the problem. We will be watching to make sure every penny owed is paid, and hope no Part D plan sponsors will require this amount of attention in the future.”